I picked up my 2008 335xi last week. It has the iPod connector in the armrest and it works quite well with my iPhone 3GS. I don't like that these iPod connectors hide the iPod player on the phone so I prefer to use Bluetooth streaming to the head unit. Then I can see the album art and control the player from the phone. It's also nice because I can just get in the car and it will connect automatically in just a few seconds without having to plug in.

I've had an Anycom FIPO bluetooth receiver for iPod for a while and decided to give it a try. It has been hit and miss with other devices that expect to see an iPod attached but it worked like a charm here. Even better, I've not experienced any skipping which was a problem with my Kenwood BT838U.

If you're interested they sell for $34.95 on eBay. I purchased mine over a year ago so I'm not sure if these are the exact same as mine. They look alike. YMMV.

I think he's asking if the device, not the phone is charged/powered. There are a few devices on the market, using bluetooth, that do not charge while in use. (i.e. you'd have to turn off bluetooth pairing for it to charge while plugged in)

I'd also like to know the answers to his other questions. I have a bluetooth solution that I'm for the most part happy with, but wouldn't mind having integrated steering wheel controls.